ACIT, Ernakulam V. Shri Ninan Philip, Ernakulam

ITA 174/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0986 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 18-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 09-03-2011
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Keywords: Valuation report; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.174/COCH/2011 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), ERNAKULAM. VS. SHRI NINAN PHILIP, PROP. M/S. HERBAL ISOLATES (P) LTD., VADAVUCODE, PUTHENCRUZ, ERNAKULAM. [PAN :AFRPP 0744C] (REVENUE-APPELLANT) (ASSESSEE-R ESPONDENT) REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR ASSESSEE BY SHRI THOMSON THOMAS, CA DATE OF HEARING 18/12/2012 DATE OF PRONOUNCEMENT 15/02/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DATED 30-11-2010 PASSED BY THE LD. CIT(A)-II, KOCHI AND IT RELATES T O THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE IS ASSAILING THE DECISION OF THE LD. CIT(A) IN DETERMINING THE VALUE AS ON 01-04-1981 AT RS. 49,000/- PER CENT AS AGAINS T RS. 15,000/- PER CENT DETERMINED BY THE ASSESSING OFFICER WHILE COMPUTING THE CAPITA L GAIN OF THE LAND SOLD BY THE ASSESSEE. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE, ALONG WITH SOME OTHER PERSONS, SOLD A LAND LOCATED AT TRIVANDRUM AN D THE SHARE OF THE ASSESSEE IN THE SAID SALE WAS RS. 40.00 LAKHS. WHILE WORKING OUT T HE LONG TERM CAPITAL GAIN, THE ASSESSEE ADOPTED THE VALUE OF THE LAND AS ON 01-04- 1981 AT RS.7.00 LAKHS FOR AN EXTENT OF 10 CENTS, THUS GIVING AN AVERAGE VALUE OF RS.70, 000 PER CENT. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CALLED FOR DETAILS FROM SUB-REGISTRAR, I.T.A. NO.174/COCH/2011 2 TRIVANDRUM. FROM THE DETAILS SUBMITTED BY THE SUB- REGISTRAR, IT WAS NOTICED THAT A LAND ADMEASURING 16.5 CENTS WAS SOLD ON 30-06-1980 AT AN AVERAGE RATE OF RS.15,151/- PER CENT, VIDE SALE DEED NO. 2013/1980. ANOTHER P ROPERTY ADMEASURING 6.812 CENTS OF LAND WITH A BUILDING THEREON WAS FOUND TO HAVE B EEN TRANSFERRED ON 06-08-1981 FOR AN AVERAGE CONSIDERATION OF RS.4770/- PER CENT. TH E ASSESSING OFFICER HAS OBSERVED THAT BOTH THE PROPERTIES WERE LOCATED IN THE SAME L OCALITY AS THAT OF THE PROPERTY BELONGING TO THE ASSESSEE. ACCORDINGLY, THE ASSESS ING OFFICER PROPOSED TO ADOPT THE VALUE AS ON 01-04-1981 AT RS.15,000/- PER CENT AND ACCORDINGLY, COMPUTED THE LONG TERM CAPITAL GAIN ON SALE OF LAND. THE ASSESSING O FFICER HAS OBSERVED THAT THE THEN AUTHORISED REPRESENTATIVE OF THE ASSESSEE ALSO AGRE ED TO THE VALUE OF RS. 15,000/- PER CENT. 4. IN THE APPEAL FILED BEFORE THE LD. CIT(A), THE A SSESSEE SUBMITTED THAT HE HAS OBJECTED TO THE PROPOSAL OF THE ASSESSING OFFICER T O ADOPT THE VALUE OF RS.15,000/- AS ON 1.4.1981 BY FILING A LETTER ON 07-12-2009. IT WAS ALSO STATED IN THAT LETTER THAT THE AUTHORISED REPRESENTATIVE HAS AGREED TO THE PROPOSA L OF THE AO WITHOUT KNOWING THE LOCATION OF THE PROPERTY. BEFORE THE LD. CIT(A), T HE ASSESSEE FILED VALUATION REPORTS GIVEN BY TWO APPROVED REGISTERED VALUERS, WHO HAD D ETERMINED THE MARKET VALUE AS ON 01-04-1981 AT RS. 65,000/- PER CENT AND RS. 69,000/ - PER CENT RESPECTIVELY. THE ASSESSEE ALSO SUBMITTED A COPY OF RETURN OF INCOME FILED BY ANOTHER ASSESSEE NAMED DR. NIRMALA DEVI RAVINDRAN WHO HAD SOLD A LAND LOCA TED IN THE SAME AREA. IN HER RETURN OF INCOME, THE SAID ASSESSEE HAD ADOPTED THE COST AS ON 01-04-1981 AT RS. 50,000/- PER CENT. 5. HENCE ON A CONSPECTUS OF THE MATTER, THE LD. CIT (A) ADOPTED THE AVERAGE OF FOUR VALUES, VIZ., RS. 15,000/-, RS. 65,000/-, RS. 69,00 0/- AND RS. 50,000/- AND DETERMINED THE VALUE AS ON 01-04-1981 AT RS. 49,000/- PER CENT . AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAND SOLD BY THE ASSESSEE IS LOCATED ON THE MAIN ROAD; WHEREAS THE TWO LANDS REF ERRED BY THE SUB-REGISTRAR ARE LOCATED ON THE SIDE ROADS. HE SUBMITTED THAT THE LA ND LOCATED IN THE MAIN ROAD WILL I.T.A. NO.174/COCH/2011 3 COMMAND A HIGHER VALUE AS COMPARED TO THE LAND LOCA TED AT THE SIDE ROADS. THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS ADOPTED THE VALUE AS ON 01-04-1981 BY CONSIDERING THE VALUATION REPORTS GIVEN BY THE TWO REGISTERED V ALUERS AND ALSO THE VALUE DECLARED IN THE RETURN OF INCOME IN THE CASE OF DR. NIRMALA DEV I RAVINDRAN. BY PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F JAWAJEE NAGNATHAM VS. RDO (1994 SCR (1) 368, 1994 SCC(4) 595), THE LD COUNSEL SUBMITTED THAT THE BASIC VALUATION REGISTER MAINTAINED FOR THE PURPOSES OF C OLLECTING STAMP DUTY HAS NO STATUTORY BASE OR FORCE. FURTHER, BY PLACING RELIA NCE ON THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. SMT. CHANDRA BALA KRISHNAN (2008)(9 DTR (KER) 177), THE COUNSEL SUBMITTED THAT THE POSSIBILITY OF UNDER STATING THE CONSIDERATION IN THE TWO CASES REFERRED BY THE SUB REGISTRAR CANNOT BE RULED OUT. ACCORDINGLY, HE SUBMITTED THAT THE LD CIT(A) HAS JUDICIOUSLY TAKEN THE AVERAGE OF ALL THE RELEVANT INPUTS RELATING TO THE VALUATION AND HENCE PRAYED FOR UPHOLDING THE ORDER PASSED BY THE LD. CIT(A). 7. THE LD. DR SUBMITTED THAT THE VALUE OF RS. 50,00 0/- PER CENT AS ON 1.4.1981, DECLARED BY DR. NIRMALA DEVI RAVINDRAN HAS BEEN ACC EPTED IN THE SUMMARY PROCEEDINGS U/S. 143(1) AND HENCE, IT CANNOT BE SAID THAT THE D EPARTMENT HAS ACCEPTED THE SAID VALUE. REFERRING TO THE VALUATION REPORT SUBMITTED BY SHRI S. NARAYANASWAMY IYER, THE LD. DR SUBMITTED THAT THE LAND REQUIRED THE REGISTE RED VALUER WITH HIS OBSERVATION THAT THE IMPUGNED LAND IS A LOW LYING LAND AND HUGE QUAN TITIES OF EARTH WORK HAVE TO BE DONE AND RETAINING WALL HAS TO BE BUILD TO MAKE IT A COMMERCIAL PLOT AT THE ROAD LEVEL OF KESTON CLUB, DEVASOM BOARD JUNCTION. THE LD. DR SU BMITTED THAT THE VALUATION REPORT IS THE OPINION GIVEN BY THE CONCERNED VALUER AND IT DOES NOT HAVE ANY STATUTORY FORCE. HOWEVER, THE ASSESSING OFFICER HAS DETERMINED THE V ALUE OF RS. 15,000/- BY REFERRING TO THE COMPARABLE CASES SUBMITTED BY THE SUB-REGISTRAR . ACCORDINGLY, HE SUBMITTED THAT THE VALUE OF RS. 15,000/- ADOPTED BY THE ASSESSING OFFICER IS A REASONABLE ONE AND HENCE THE ORDER PASSED BY THE LD. CIT(A) NEEDS TO B E REVERSED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE RECORD. WE NOTICE THAT THE LAND SOLD BY THE ASSESSEE IS LOCATE D IN A PLACE CALLED BELHAVEN GARDENS AREA. THE ASSESSEE HAS FILED A MAP DEPICTING THE L OCATION OF THE IMPUGNED LAND AND ALSO THE LANDS REFERRED BY THE SUB-REGISTRAR. WE N OTICE THAT THE LAND SOLD BY THE I.T.A. NO.174/COCH/2011 4 ASSESSEE IS LOCATED ON A MAIN ROAD CALLED KESTON R OAD AND THE LANDS REFERRED BY THE SUB-REGISTRAR ARE LOCATED IN THE SIDE ROADS OF BELH AVEN GARDENS. BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED VALUATION REPORTS GIVEN BY T WO DIFFERENT REGISTERED VALUERS AND ALSO THE ASSESSMENT RECORD PERTAINING TO DR. NIRMAL A DEVI RAVINDRAN WHO HAD ALSO SOLD A PROPERTY LOCATED IN THAT AREA. HENCE, ON A CONSP ECTUS OF THE MATTER, THE LD. CIT(A) HAS DETERMINED THE VALUE AS ON 01-04-1981 AT RS. 49 ,000/- BY TAKING AVERAGE OF ALL AVAILABLE DATAS. THE OBSERVATIONS MADE BY THE LD. CIT(A) IN THIS REGARD ARE EXTRACTED BELOW FOR THE SAKE OF CONVENIENCE. 12. HENCE THE VIABLE ALTERNATIVE REMAINS ONLY TO AVERAGE OUT THE VARIOUS VALUATIONS DONE BY THE LOWER AUTHORITIES IN THIS RE GARD. HENCE, THE VALUATION IS TAKEN AS MEAN OF 4 VALUATIONS AVAILABLE ON RECORD V IZ. 15000/- (AS ADOPTED BY THE ASSESSING OFFICER) + 65000 + 69000 (AS ADOPTED BY THE TWO APPROVED REGISTERED VALUERS) + 50,000/- (AS APPROVED BY THE DEPARTMENT IN A COMPARABLE CASE) / 4 = RS. 49,750/-. THEREFORE, THE VALUATION AS ON 1/4/981 MAY BE ADOPTED AT RS. 49,000/- IN THIS CASE. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO GIVE EFFECT TO THIS ORDER AS PER THE ABOVE. 9. WE HAVE CAREFULLY CONSIDERED THE ORDER PASSE D BY THE LD. CIT(A) WITH REFERENCE TO THE FACTS DISCUSSED ABOVE. WE NOTICE THAT THE LD. CIT(A) HAS TAKEN A CONSCIOUS DECISION AFTER TAKING INTO CONSIDERATION ALL THE FA CTORS RELATING TO THE ISSUE. WE NOTICE THAT THE AO HAS BLINDLY PLACED RELIANCE ON THE COMP ARABLE CASES COLLECTED FROM THE SUB REGISTRAR, WITHOUT FACTORING IN THE PRICE ADVANTAGE COMMANDED BY THE IMPUGNED PROPERTY DUE TO ITS STRATEGIC LOCATION. UNDER THE SE CIRCUMSTANCES, WE DO NOT FIND ANY NECESSITY TO INTERFERE WITH THE DECISION TAKEN BY T HE LD. CIT(A), AS THE PRINCIPLE OF AVERAGING GENERALLY EVENS OUT THE ABNORMALITIES. 10. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 15-02-2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 15TH FEBRUARY, 2013 GJ I.T.A. NO.174/COCH/2011 5 COPY TO: 1. SHRI NINAN PHILIP, PROP. M/S. HERBAL ISOLATES (P ) LTD., VADAVUCODE, PUTHENCRUZ, ERNAKULAM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCL E-2(2), ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN